As unpleasant as it is to say, the Occupational Safety and Health Administration (OSHA) contractor-related outlook for 2011 is bleak. This applies to every contractor, whether it is the most safety conscious or greatest of risk-takers. It is demonstrated in the direction set by OSHA’s leadership and Congress’ financial support. Although OSHA’s 2011 budget still contains provisions for compliance assistance, the amounts allocated to that process are far less than those allocated for standards development and enforcement.

“Enforcement remains a priority for us because it is a proven, useful deterrent, even for the best employers … . The threat of enforcement and penalties reminds all employers to do the right thing for their workers,” said David Michaels, assistant secretary of labor for occupational safety and health, in a speech given at the Fall 2010 Pennsylvania Governor’s Occupational Safety & Health Conference in Hershey, Pa. The message is clear. You will be cited for violations regardless of effort. Moreover, OSHA is making every attempt to ensure the point is driven home by increasing penalties.
Under the new penalty structure that went into effect Oct. 1, 2010, OSHA administratively increased penalties. Maximum fines set by Congress continue to be the same. The difference is the calculation system used. The actual fine assessed is a function of the gravity (severity and probability) of the violation. Under the old system, a violation having “low” injury severity and a “lesser” potential for that injury resulted in a base fine of $1,500. Under the current system, the base fine begins at $3,000.

Both systems adjust penalties for employer history, size and good faith. Here, too, OSHA has taken initiative to enhance fines and penalties. Under the old system, reduction for employer size was 20 percent for those with 1–25 employees, 40 percent with 26–100 employees and 60 percent with 101–250 employees. Under the new system, the adjustments are reduced to 10 percent, 30 percent and 40 percent respectively. Neither system allowed a reduction for workplaces having more than 250 employees. The reduction for an employer’s history will remain at 10 percent for those having no violations within the last five years. However, under the new system, a 10 percent penalty is added for those that had a violation in the same period. The good-faith reduction for having a safety program remains at 25 percent.

The final insult is the method for calculating the reductions. Under the old system, the sum of all reductions was multiplied by the penalty. The new system calculates it serially. When applied to the fine, the serial method results in a smaller reduction.

State plans are not exempt from the federal OSHA’s direction. In 2010, a special enhanced review of all the state plan programs was conducted. Concern was expressed that there were fewer inspections performed in state plan states in 2010 than in 2009. It was noted that fines in these jurisdictions are often much lower than those given in federal states. To provide enhanced oversight, federal OSHA offices were opened in several cities, including Honolulu; Las Vegas; Oakland, Calif.; Phoenix and San Diego. Again, the goal is to strengthen enforcement. Going forward, OSHA will expect the state enforcement efforts to be consistent with the federal plan. States must implement National Emphasis Programs established by the federal OSHA and adopt the new penalty calculation system or one equally as effective. The new penalty plan created by states must go into effect by April 1, 2011.
Of particular concern in 2011 and beyond is the direction given by federal OSHA on the creation of the Injury and Illness Prevention Program standard. While none of us would argue the need for and benefits of such a program, the concern is with OSHA’s intent. Michaels clearly expressed his views in a speech at the Oil & Gas OSHA Safety Conference in 2010: “Under this plan, employers would address all recognized hazards covered under the General Duty Clause, not just ones for which OSHA has standards.” This implies it may be a “catch-all.”

Electrical contractors need to monitor the progress of the development of this standard. Representatives of the National Electrical Contractors Association (NECA) have been involved in all stakeholder meetings. With their input and that of other similar stakeholders, the hope is that the final product will be a vehicle to help employers improve safety as opposed to fulfilling any other purpose.

As always, regardless of the direction and goals established, the overriding factor controlling what actually is done is the dollar. Looking at OSHA’s 2011 budget, it appears Michaels’ funding requests are in sync with the direction described. The following is a description of the monies allocated for 2011 and how they will affect activities for the year.

For 2011, OSHA requested $573 million. This represents an increase of $14.47 million over the $558.6 million enacted budget in 2010. Looking at the overall jump in funding alone would make one wonder how this will translate to an increase in the number of inspections. As they say, the devil is in the details. A closer look at the individual budget lines reveals that approximately 70 percent of the increase is for enforcement. The safety and health standards budget line accounted for about 20 percent. Only minor increases were requested for state programs and consultation, technical support, training grants, and safety and health statistics. The budget line for federal compliance assistance actually decreased. OSHA proposes to shift 35 positions from assistance to enforcement.

The actual request for federal enforcement amounts to $233.4 million, an increase of $10 million. With these funds, OSHA plans to conduct 42,250 inspections. Of these, 33,250 will be safety inspections and 9,000 health inspections. In 2010, OSHA completed 41,000 inspections. This exceeds the goal it set with that year’s budget by 2,300, ending with a total of 38,700 inspections. If OSHA surpasses this year’s proposed mark by the same percentage, the total could reach more than 44,700.

Funds for safety and health standards for 2011 equal $23.75 million, or $10 million over the 2010 budget. In part, OSHA’s justification for this increase was the need for additional technical and specialized contract resources to support rulemaking activities to ensure it needed to address the proposed regulatory agenda. Even with its efforts to expedite rulemaking by maneuvers, such as bypassing the Advance Notice of Proposed Rulemaking and going straight to a Small Business Review Panel, the Injury and Illness Prevention Program (I2P2) is probably still several years away. Ahead are the proposed rule, Office of Management and Budget review and public hearings. This doesn’t even include any potential lawsuits. OSHA itself has stated it may be one to two years away from offering a proposed rule. Another rule that is questionable for 2011 is the Globally Harmonized System (GHS). As of late 2010, there was no word on what, if any, opposition existed. Finally, in the questionable category is the combustible dust standard. Stakeholder meetings were held in late 2010 with a proposed rule sent to a Small Business Review Panel expected by April 2011.

On the completed side with possible implementation for 2011 are the cranes and derricks standard and MSD/OSHA 300 Log. Although the cranes and derricks standard was completed in July 2010, it is worth mentioning since its true test will be the initial enforcement through 2011. (See “Doing the Heavy Lifting, Electrical Contractor, December 2010, on www.ecmag.com.) The addition of MSDs to the OSHA Log will depend on whether groups who say they will file lawsuits in opposition to the rule carry out their threats. And last, but not least, is the Electric Power Transmission and Distribution; Electrical Protective Equipment update. OSHA plans to have this completed by February 2011 to ensure that the standard for General Industry corresponds with construction. In addition, it will address changes to the minimum approach distances for specific ranges of voltages.

The increased funding for state plans is targeted at assisting them with the promulgation of standards, inspections and compliance-assistance activities. However, with only an additional $1.5 million over 2010, there is little the states can be expected to improve. And, with OSHA asking states to reevaluate their resource allocations between enforcement and outreach programs with the goal of focusing more on enforcement, it is clear where most of the money will go.

The amounts are insignificant for the remaining areas that received increases. Funding for technical support went up $266,000. Money for training grants increased by $250,000; executive direction, $246,000; and safety and health statistics activity, only $106,000. Thoughts are these areas will continue along a status quo.

The area that will not go on “business as usual” and one that is the greatest disappointment is compliance assistance. As mentioned earlier, OSHA has shifted manpower from assistance to enforcement. The resulting decrease in assistance funding amounts to $3.1 million, and this line affects all cooperative programs. In jeopardy are the Voluntary Protection Programs (VPP), Strategic Partnerships and Alliance Programs. OSHA plans to maintain existing partnerships and its rate of increase in programs. The question is whether or not this will be possible. Funding from compliance assistance must also support the training institute programs and other compliance-assistance materials, such as the QuickCards.

It is clear OSHA understands the risk to these programs. It identified in the budget justification that VPP will need to seek alternate sources of funding. If successful, this will be a “win-win” situation. I hope this occurs. It is also hoped that OSHA can streamline other compliance-assistance programs.
Electrical contractors should continue to demonstrate their commitment to safety by addressing hazards voluntarily. It’s the right thing to do. Electrical contractors must also be wary of any safety oversights for another reason: OSHA is watching.

O’CONNOR is with Intec, a safety consulting, training and publishing firm that offers on-site assistance and produces manuals, training videos and software for contractors. Based in Waverly, Pa., he can be reached at 607.624.7159 and joconnor@intecweb.com.